More than 1 million square feet of industrial space was absorbed in 4Q 2012 and a total of 4.2 million square feet was absorbed for the entire 2012 pushing the vacancy rate down to 5.1% for the Denver commercial real estate market.
The vacancy rate for the industrial submarket for 3Q 2012 was at 5.4% compared to 7.8% in 4Q 2011. The lease rate increased 10 cents from 3Q 2012 to $5.98 per square foot and a 4 cent increase year-over-year from 4Q of 2011. This was the 11th straight quarter of positive net absorption in the Denver industrial submarket which also fueled industrial investment sales of $209 million for the year. One of the strongest industrial submarket is the southeast area with an average asking rate at $8.42 per square foot which is one of the highest lease rates in the metro Denver area.
The office and retail sector for the Denver metro area also showed positive absorption in 4Q 2012 with declining vacancy rate year-over-year. Vacancy rate for the office market stood at 15.1% 4Q 2012 compared to 15.3% in 3Q 2012 and down from 15.7% in 4Q 2011. The lease rate for the Denver office submarket market stood at $20.20 in 4Q down 3 cents from 3Q 2012 but an overall increase from $19.75 in 4Q 2011. In 2012, 695,000 square feet of office space was absorbed. Downtown and LoDo continued to be the pace setter with an average asking rate of $25.45 per square foot.
The retail submarket also saw an improved vacancy rate which stood at 7.7% in 4Q 2012 but remained flat from 3Q 2012 but down 0.4% from 4Q 2011. Asking rate stood at $15.39 per square foot down 16 cents from 3Q 2012 but up 9 cents from 4Q 2011. In 2012, 564,000 square feet of retail space was absorbed. Colorado Blvd – Midtown submarket continued to be the strongest retail market with an average asking rate of $24 per square foot and a vacancy rate of 1.7%.